Let's start with the Democratic Party. We should remember the famous Democratic President franklin roosevelt. Everyone has learned it in middle school history textbooks. He carried out the New Deal and saved the United States from the financial crisis in the 1930s. Roosevelt's things actually become a set of systematic values and systems, which are generally called neoliberalism, social liberalism, New Deal liberalism or welfare liberalism. In order to distinguish it from neoliberalism, we call it social neoliberalism. So what about social liberalism? Anyone who has studied history knows that the financial crisis at that time was unprecedented. Keynes pointed out that the crisis exposed the disadvantages of the free market-the invisible hand could not effectively regulate the economy in a short time. Why? Because the self-regulation mechanism of the market is price: the relationship between supply and demand is mediated by the rise and fall of price. Keynes pointed out that prices are sticky in a free market and often cannot be changed flexibly, so the work can't be done well. The market without intervention will always go to crisis. The solution is to rely on government intervention. At that time, the unemployment situation was extremely severe. In this case, what should the free market do? Is to lower wages and let more people find jobs. But as a price, wages are also sticky and cannot be reduced quickly, leading to a large number of unemployment in this process. Keynes said that at this time, the government should directly act as a player in the market and initiate interest!
Planning to build railways and public facilities, recruiting workers and solving unemployment problems, etc., are all Keynesian economies. It is not difficult for people who don't know economics to understand. Since it is necessary to rely on government expenditure to solve the problem, natural tax payment will also increase, so the road of economics is always accompanied by high taxes.
Therefore, social liberalism believes that the road of capitalism is to be taken, but the government should also play the role of intervention and supervision.
In addition, social liberalism also has the concept of welfare state. This theory came out long before Keynes, and it was mainly the product of studying socialism and the influence of socialism-Marxism at that time. The so-called welfare state means that the state pays high taxes first, and then undertakes education, health and other undertakings involving the welfare of citizens. First of all, social liberals believe in equal opportunities and believe that the state should provide a starting point for citizens. So poor people don't need money to go to school: your parents are poor and should not affect your personal development. The state helps you pay for your education, takes you to a certain starting line, and allows you to compete with people with better conditions. Secondly, all citizens have the right to a certain degree of welfare, which is best handled by the state. Therefore, the welfare state has obvious socialist nature. However, if the state wants to guarantee, it must have money, and this money is taken from taxpayers. So the welfare state will inevitably bring high taxes.
Social liberalism is also very sensitive to social inequality and so on. Generally speaking, although free market competition is quite efficient in the economic sense, it often leads to unfair income distribution and disparity between the rich and the poor. This has affected the equality of opportunity and the individual's claim to some basic welfare rights, so social liberalism says that the state should manage and solve this unfair problem. At that time, many intellectuals, such as Galbraith, Rawls and Dewey, advocated this welfare society.
Generally speaking, social liberalism adopts Keynesian supply-side economics and emphasizes government intervention; It values fairness more than efficiency; It advocates the development of welfarism and social planning. Social liberalism is always associated with higher taxes and pays more attention to the interests of ordinary people. After World War II, movements such as social liberalism and social democracy have always been associated with the working class and trade union movements.
At present, in the Nordic countries, welfarism is extremely developed. In Britain and the United States, each has an incomplete welfare system, which is called dual-track system in China: national security system and private system, which go hand in hand.
In Britain, the party that traditionally represents social liberalism is the Labour Party. And the Social Democratic Party.
2) Neoliberalism and economic conservatism
On the other hand, the right-wing Republicans adopt economic conservatism. It believes in/kloc-the philosophy of free market economy in the 8th and 9th centuries: it believes in the power of the invisible hand, opposes market intervention, and even more opposes socialism. The ancestors of this philosophy are naturally the classical economics of Adam Smith and Ricardo in the eighteenth and ninth centuries; 1At the end of the 9th century and the beginning of the 20th century, scholars such as jevons, mengle, Walras and Marshall made this kind of economics systematic and scientific, developed into neoclassical economics, and became the discipline paradigm of current mainstream economics. After the war, the Austrian school headed by Hayek, Friedman's monetarism and the Chicago school influenced by it appeared, trying to revive classical liberalism. In the stagflation era caused by the oil crisis in the 1970s, people's belief in Keynesianism was seriously shaken, and finally gained the trust of two right-wing parties in Britain and the United States.
The welfare society will inevitably bring high taxes, which also causes great dissatisfaction among political philosophers like Nozick: they try to prove that the welfare society stands in the wrong position and represents social injustice on the philosophical level. Hayek, Friedman and Nozick are known as the ideological treasure house of Anglo-American conservatism in 1970s and 1980s.
The Republican Party in the United States and the Conservative Party in Britain have fully accepted this belief in the free market and classical liberal economic philosophy since the Reagan era and the Thatcher era respectively. They adopt monetarism and supply-side economic policies, engage in privatization and deregulation, reduce taxes, reduce the intervention role of the government, pursue free trade, and let the market adjust the economy by itself. At the same time, the original welfare social plan was abandoned. This economic philosophy is called neo-liberalism. You can't confuse it with the "neo-liberalism" mentioned above.
This neo-liberalism is also in line with classical liberalism. We say that the current Conservative Party's economic conservatism pursues this kind of classical liberalism: it advocates the right of individuals to confront the government, so the government cannot levy my taxes at will. Neo-liberal economics provides economic arguments for this classical liberalism.
This new liberalism, which pursues free market, believes that the market is the most brilliant resource allocation tool and has sufficient self-regulation ability. Keynes's government intervention may solve the short-term problem, but it will only make it worse in the long run. Human intervention is not worthy of the market, and it is best to leave it to the market to adjust itself.
After World War II, governments all over the world believed in Keynesianism, including the then International Monetary Fund (IMF). After 1970s, neoliberalism became the mainstream, especially in the World Bank (WB) and IMF. They are pursuing the neo-liberal economic philosophy all over the world, engaging in free marketization, privatization and deregulation, demanding to reduce government expenditure, eliminate protectionist policies and pursue free trade.
Neo-liberal economics is generally considered to pay more attention to efficiency than fairness. It has an almost superstitious attitude towards the free market. It must be accompanied by low taxes, because high taxes are considered to reduce incentives and are not conducive to economic development: if half of your salary is used to pay taxes, your motivation may not be very high. Lack of government control and low taxes will inevitably lead to the abolition of welfarism, because the state has no money to run so many schools and hospitals. In addition, the original philosophy of classical liberalism is that individuals should stand on their own feet and struggle on their own, which is completely in line with this line. Although the idea of equal opportunity has penetrated into western ideology and become the bottom line that both left and right factions must accept, the attitudes of classical liberalism and social liberalism are still different. The attitude of classical liberals makes them more willing to give up welfarism.
For the general public, this policy is naturally not so pleasing because generous welfarism no longer exists. We say that the market of neoliberalism and economic conservatism is more conducive to the elite, which is the reason. The same is true for the business community. The left-wing party that believes in social liberalism represents the interests of workers and laborers, and the right-wing party that believes in neo-liberal economics represents the interests of capital. This explains why financial capitalists on Wall Street love Republicans. In addition, the industry also appreciates the Republican Party which pursues free trade and low corporate tax.